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About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved ... (More)

About this blog: I grew up in Los Angeles and moved to the area in 1963 when I started graduate school at Stanford. Nancy and I were married in 1977 and we lived for nearly 30 years in the Duveneck school area. Our children went to Paly. We moved downtown in 2006 and enjoy being able to walk to activities. I do not drive and being downtown where I work and close to the CalTrain station and downtown amenities makes my life more independent. I have worked all my life as an economist focusing on the California economy. My work centers around two main activities. The first is helping regional planning agencies such as ABAG understand their long-term growth outlook. I do this for several regional planning agencies in northern, southern and central coast California. My other main activity is studying workforce trends and policy implications both as a professional and as a volunteer member of the NOVA (Silicon Valley) and state workforce boards. The title of the blog is Invest or Die and that is what I believe is the imperative for our local area, region, state and nation. That includes investing in people, in infrastructure and in making our communities great places to live and work. I served on the recent Palo Alto Infrastructure Commission. I also believe that our local and state economy benefits from being a welcoming community, which mostly we are a leader in, for people of all religions, sexual preferences and places of birth. (Hide)

A Bit of Good News

Uploaded: Dec 17, 2011

The California economy continued to grow in November and outpace the nation in job growth over the past 12 months with a 1.7% gain in jobs compared to 1.2% nationally.

The best news is that the unemployment rate fell to 11.3% from 12.5% a year ago. The number of unemployed residents dropped by more than 200,000 over the past year though 2 million residents are still unemployed.

And, unlike the nation where people dropped out of the labor force in November, California's unemployment rate drop occurred while the labor force increased.

The California story is still a tale of two economiesby geography and by industry.

Job growth remains centered in the urban coastal regions and in the technology, trade and tourism sectors. The San Jose and San Diego metro areas lead the large employment centers in percentage job gains. The San Francisco Area is close behind.

These areas are seeing a flurry of start-ups, IPOs coming to market, expanding exports and a rising level of optimism about the future. In the high tech centers of the Bay Area, vacancy rates are falling, rents are rising and new commercial building can be seen again.

Unemployment rates in the Bay Area are declining though still high by historical standards. The November unemployment rate for Santa Clara County was 9.1% down from 10.9% a year ago; 7.5% in San Mateo County down from 8.6% and 7.8% in San Framcisco down from 9.6%.

November did see the beginnings of job recovery in areas that had been lagging including the Sacramento region, the East Bay in the Bay Area, the Riverside-San Bernardino area and selected central valley counties.

The strong job growth sectors are a mixture of high wage jobs in professional, scientific and information services, and jobs in health services, food services and retail trade where more seasonal workers than normal were hired in November.

Manufacturing and construction lost jobs in November reversing earlier gains.

Job growth in November was modest (6,600) according to the payroll survey with an additional 11,900 jobs added to the October total. However, the household survey, which fluctuates from month to month but does include self-employed workers, recorded a gain of more than 100,000 jobs.

In contrast to the defense cut recession in the early 1990s and ther dot.com bust recession after 2000, this recession was caused more by temporary factors (the loss of 600,000 jobs related to the construction downturn) rather than permanent losses in the state's economic base. Technology, trade and tourism are on the upswing again and the recovery is ever so slowly broadening to other sectors except housing.

California has reached record export levels and the state captures 50% of national VC funding.

November's good news is tempered by the realization that there are still 1 million jobs to recover in California from before the recession and that the process of recovery is underway but still much slower than hoped for or needed.

And political gridlock in the state and nation together with economic turmoil and a likely recession in Europe provide headwinds for the state's now expanding economy.

With all due respect Mr. Levy, please get real! The improvement in both California's and the nation's unemployment rate or job additions during November, is because of the retail hiring done for the "commercialized" Christmas season. Nothing has really changed. By the end of January 2012, most of those temporary retail jobs will disappear, and the jobless rate will inch up yet, again. This nation has been in severe economic turmoil since the end of 2007, and there has been no significant improvement, despite you and other economic forecasters trying to "spin" much to do about nothing, over trivial percentage movements. For most struggling Americans, and that is the majority of Americans, the personal recession of day to day struggle never ended, depite the so call economic experts stating there was an official end to the recession in 2009. This nation, and major states like California have the largest numbers of non-working adults since the depression. The only work sector of the U.S. society that is improving employment wise, are those fortunate enough to work in technology related fields. Technology is the most prosperous area of the economy. Unfortunately, not everyone can secure employment in the technology sector due to lack of skills, and/or the domination of the field by younger workers, to the exclusion of older workers who have the skills. Fortunately, it takes more to make a well rounded economy - like construction, education, manufacturing, services, etc, and hence, a well rounded nation. No one can doubt that our nation is going through an economic metamorphis, and we are re-evaluating what we can and need to be in order for all Americans to succeed personally, and economically. We are definetly not there yet! More people have commented to me recently that this is their third consecutive holiday season where they cannot afford to even celebrate the season, yet they are merely happy to have made it through another year with a roof over their head, and the ability to eat everyday. Currently, most people in this nation are just concerned about the bottom of Maslow's pryamid -basic needs, and how to survive. So, don't get too wrapped up in the miniscule "temporary" job gains. Systemic improvements need to occur in order for there to be real improvement in the overall economy, and real and lasting job growth. Happy Holidays!

Posted by stephen levy,
a resident of ,
on Dec 18, 2011 at 12:06 pmstephen levy is a registered user.

The strongest job gains in November were in seasonal retail hiring that was above normal.

However, in the previous two months the state saw a gain of 75,000 jobs and in the past 12 months a gain of 230,000 jobs of which only 10% were in retail.

It is also true that a large share of the job gains in Silicon Valley were in technology sectors.

However throughout the state and in Silcion Valley there were gains in health services, restaurants, construction, wholesale trade, business services and private education as well as gains in technology sectors.

In Silicon Valley there was an uptick in computer and electronics manufacturing although statewide manufacturing job levels were flat.

Siliocn Valley is the leading large metro area in terms of job growth over the past year (+3.3%) and San Francisco is also above average.

The local recovery is only now starting to spread beyond technology. On the other hand when Google, Facebook, Apple and other firms expand they do not hire only technology workers.

There are, as I said, still 2 million Californians who are unemployed--the "normal" amount would be just under 1 million and as the previous poster said, there is still lots of misery to go around.

Still, I think it is fair to say that the past few months have brought a bit of good news on the economy and especially so for our local economy where the many and diverse technology sectors are the leading drivers of growth.

This week Facebook will have moved to larger quarters on the way to adding several thousand jobs over the next 3 years.

The good news does not negate anyone's personal struggle in this economy but, on the other hand, it does bring a sign of more hope for the future.

"In Silicon Valley there was an uptick in computer and electronics manufacturing although statewide manufacturing job levels were flat."

This element of the jobs situation is troublesome. What can be done to bring back manufacturing to California? For example, there is a lot of potential in agricultural mechanization, batteries, electric vehicles, smart power grid, efficient electic motors, power plants, etc.

UCLA Anderson Forecast is one of the most widely watched and often-cited economic outlooks for California and the nation and was unique in predicting both the seriousness of the early-1990s downturn in California and the strength of the state's rebound since 1993. More recently, the Forecast was credited as the first major U.S. economic forecasting group to declare the recession of 2001.
---

Posted by stephen levy,
a resident of ,
on Dec 18, 2011 at 6:56 pmstephen levy is a registered user.

Robert,

The manufacturing job issue is tough. There will be some opportunities in what is called "advanced manufacturing" where technology and high skills are important. You listed some of the possbilities above.

But job growth in manufacturing overall is not likely, Even with exports reaching record levels, productivity gains mean companies in the U.S. can and do make more with fewer people each year. it is helpful to remember that manufacturing production and exports have been growing for decades while job levels have fallen as productivity growth outpaces sales growth even with strong export gains.

Some jobs are being regained, as in auto produciton by dramatic reductions in wages. So the new GM workers make $15 an hour plus redcued benefits compared to the previous generation doing the same work.

The best shot at manufacturing gains are good technical education and training, which is needed in any event to replace retirign skilled machinests and similar occupations. There will be job openings even as job levels fall as retirments will surge over the next ten years.

The poster Sources-please will be happy to learn that all the data cited in this post come from the Bureau of Labor Statistics (look for the all state data on Dec 20) and that the UCLA Anderson Forecast reports the same conclusions that I report above.

Once again, thank you for your analysis, even though I find it somewhat depressing, because I believe in well-paid blue collar jobs, to provide a stable society.

Can we not build the infrastructure that will pay for itself, and provide for our needs? For example, nuclear and solar/wind power plants, roads and bridges, mechanized harvesting machines in agriculture, airports, improved rail, educational vouchers, exploitation of offshore oil, improved water transfers, improved water use efficiencies, etc? Are we not inhibiting blue collar econmic growth for no good reason?

I am against all the ideological opposition to growth. I want to see a healthy, working middle class. It can be done in a clean and healthy way. Teh Gordian knot needs to be cut.

Posted by stephen levy,
a resident of ,
on Dec 19, 2011 at 4:31 pmstephen levy is a registered user.

Robert raises a good issue--where will blue collar jobs come from.

In terms of the current struggle to recover lost jobs, I think large infrastructure investment is a triple winner. It will boost job levels when many are unemployed; it will build assets that will improve our quality of life and economic competittiveness and the jobs will go to areas of the economy and people who are likely to wait the longest in this slow recovery.

There will be blue collar job openings as baby boomers retire and we see today companies looking for skilled welders or machinests.

But the long-term outlook for job growth as opposed to replacing retiring workers is for not much growth.

It is hard for an economy, especially one like we have in Silicon Valley to not go for growth. We are at the forefront of innovation and if we step back from welcoming entrepreneurs and investors, we will lose our competitive advantage and it will become harder to maintain what we have.

" the long-term outlook for job growth as opposed to replacing retiring workers is for not much growth."

My question is why not? Don't we pay fuel taxes that are supposed to build more roads and bridges, power companies that want to drill for oil or build various power plants, consumer companies that want to build efficient appliances, etc., etc.?

Blue collar jobs range from pushing a shovel to heavy equipment operators, welders, oil rig workers, robotics technicians, nuclear power plant operators. However, we are not providing the opportunities for these workers. Why not?

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